UPDATE 4-China to allow some Canadian canola seed exports to continue -Ottawa

(Adds comment by Canadian agriculture minister)

By Kelsey Johnson and Hallie Gu

OTTAWA/BEIJING, March 31 (Reuters) – China has said it will allow some Canadian canola seed exports to continue, despite a year long trade dispute, provided the amount of foreign material in those shipments is limited, Canada’s farm minister said on Tuesday.

Shipments from other firms were still allowed but these had in theory been in jeopardy, give that an agreed standard between the two countries on the amount of foreign material allowed per shipment was due to expire on March 31.

Agriculture Minister Marie-Claude Bibeau said in a statement that China would allow imports to continue provided shipments contained less than 1% foreign material such as straw or chaff.

While Chinese sources had suggested that all canola seed imports would resume, the Canadian government said no agreement had been reached to allow Richardson and Viterra back into the Chinese canola seed market.

“Regaining full market access for Canadian canola seed remains our priority, and we continue to engage Chinese officials,” Bibeau said.

A Canadian government source said no new contracts between Canadian canola exporters and Chinese buyers had been signed in the past two to three weeks as industry participants waited for clarity on whether a new standard could be reached.

Richardson spokesman Jean-Marc Ruest said the company had no details about recent Canada-China discussions. Viterra spokesman Peter Flengeris could not immediately comment.

Asked Tuesday about progress on canola trade with China, Prime Minister Justin Trudeau said Canada had seen “promising signs of positive relations on specific issues”.

Canola, like soybeans, is crushed into protein-rich meal for animal feed and Canada is the world’s top supplier. ICE canola futures edged higher on Tuesday.

China’s General Administration of Customs was unavailable for comment after office hours.

China’s oilseed processors have struggled with the lowest soybean stocks since at least 2010, as the coronavirus pandemic disrupts the global supply chain of farm produce.

“The market is worried about oilseed supplies. And there is no energy left for any (trade) fights now,” said another source with a major agriculture products importer. (Reporting by Kelsey Johnson in Ottawa, Hallie Gu and Dominique Patton; Additional reporting by Rod Nickel in Winnipeg; Editing by Alison Williams and Grant McCool)